Bitcoin (BTC) has broken above a long-term descending resistance line and a short-term ascending parallel channel. It is possible that it has started a bullish trend reversal.
Bitcoin was trading below a descending resistance line since April 5. So far, the downside has led to a long-term low of $17,622 on June 18.
BTC has been on an uptrend since then and broke above the resistance line on July 18. A breakout from such a long-term resistance line often leads to a significant upward move. In this case, the 0.382 Fibonacci retracement resistance level is found at $29,400 when measuring the full height of the resistance line.
The breakout from the line also coincides with the RSI breakout above 50, which is also considered a bullish trend signal. As long as the RSI support line (green) remains in place, the bullish structure is considered intact.
short term breakout
The six-hour chart aligns with readings from the daily time frame. This indicates that BTC has broken out of an ascending parallel channel and is later validated as support (green icon). During this breakout, BTC also moved above the $22,800 horizontal resistance area.
There is almost no horizontal resistance at $32,000, except for the minor level of $28,000, as the decline intensified between June 7 and 14. Therefore, it is possible that the price may move higher.
BTC wave count analysis
The most likely wave count shows that bitcoin has completed a five-wave downward pattern (yellow) that began in April. If so, wave five was shorted and failed to move below wave three.
As for the longer-term wave count, it appears that BTC has completed an ABC corrective formation while measuring the downside movement since its all-time high. Therefore, it is possible that a significant upward move will be followed.
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